FRS Second Election Rules: Switching Between Pension and Investment Plan

What the Second Election Is

Every active FRS member gets exactly one opportunity during their career to switch between the Pension Plan and the Investment Plan. This is the Second Election, executed using Form ELE-2 (or ELE-2-EZ for a simplified version). Your initial plan choice — made within your first eight months of employment using Form ELE-1 — was your first election. The Second Election is the only other chance you get.

The election is irrevocable. Once the State Board of Administration's Plan Choice Administrator receives your completed form, and the clock strikes 4:00 PM Eastern Time on that day, the transfer is locked. You cannot switch back.

Deadline

The deadline is your last day of active FRS employment. Once you terminate, the Second Election expires permanently. There's no post-termination window, no extension, and no appeal. If you're considering the switch, file the paperwork while you're still actively employed.

Members often wait until they're close to retirement to make this decision, which creates time pressure. You need to request a cost estimate from the Division of Retirement or SBA, review the numbers, and file the form — all before your last day on payroll.

Pension Plan to Investment Plan

If you're in the Pension Plan and switch to the Investment Plan, the Division of Retirement calculates the actuarial present value of your accrued pension benefit. That dollar amount transfers into a newly created Investment Plan account in your name, where you gain control over investment allocations and distribution timing.

This path makes sense for members who want portability (taking the money to another state) or control over their investments. The trade-off: you lose the guaranteed lifetime income stream, the employer-side longevity risk, and DROP eligibility.

Investment Plan to Pension Plan

If you're in the Investment Plan and switch to the Pension Plan, your account balance transfers to the Pension Plan to buy back your service credit at actuarial cost. Two outcomes are possible:

Account balance exceeds buyback cost: The difference stays in the Investment Plan as a separate account you can access at retirement.

Account balance is less than buyback cost: You must pay the shortfall out of pocket to complete the transfer. If investment returns were poor, the gap can be significant — thousands of dollars depending on your salary and years of service.

This path appeals to members approaching retirement who want the security of a guaranteed monthly pension rather than depending on their account balance and market performance. But the math isn't always favorable, especially if your Investment Plan took losses during a downturn.

How to Decide

Request a benefit comparison from the MyFRS Financial Guidance Line (1-866-446-9377). The EY financial planners contracted by the SBA can model both scenarios with your actual numbers — your current Investment Plan balance, your accrued Pension Plan service credit, your salary, and your expected retirement date.

What they can't tell you is which plan to choose. That depends on your risk tolerance, your spouse's retirement income, your health, and whether you value guaranteed income or investment flexibility more. The Florida FRS Retirement Guide walks through the Second Election math and the questions to ask before filing Form ELE-2.

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